Double Top Pattern🧭 Overview
A Double Top is a bearish reversal pattern that indicates a potential end to an uptrend and a shift toward a downward phase. It forms an “M”-shaped structure on the chart, marked by two consecutive peaks at nearly the same level, separated by a moderate pullback known as the neckline. The pattern is confirmed when price decisively breaks and closes below the neckline, signaling weakening buying strength and a change in market control.
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🔑 Key Components of a Double Top Pattern
1️⃣ First Peak
Price rallies strongly to a high, marking the end of an extended upward move. A pullback follows, indicating the first sign of resistance.
2️⃣ Trough / Neckline
After the first peak, price retraces to a support area and stabilizes. This level forms the neckline, which acts as a key decision zone.
3️⃣ Second Peak
Price attempts to rise again toward the previous high but fails to break above it. This failure reflects weakening buying momentum and growing selling pressure.
4️⃣ Breakdown (Confirmation)
The pattern is confirmed when price breaks and closes below the neckline, signaling a shift in trend direction.
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📊 Chart Explanation
Two prominent peaks form near the same price level, highlighting strong resistance.
The pullback between the peaks creates a clear neckline support.
The second peak shows reduced strength compared to the first.
A decisive breakdown below the neckline confirms the reversal and opens the path toward lower levels.
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📝 Summary
• Double Top forms after a strong uptrend.
• Failure at the second peak indicates buyer exhaustion.
• Neckline acts as a key confirmation level.
• Breakdown below the neckline validates the reversal structure.
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⚠️ Disclaimer
📘 For educational purposes only
🙅 Not SEBI registered
❌ Not a buy/sell recommendation
🧠 Shared purely for learning and pattern understanding
📊 Not Financial Advice
